Singapore Airlines cops $4.1M fine in cartel case

Dec. 21
(BusinessDesk) - Singapore Airlines Cargo has been fined
$4.1 million for its role in colluding to fix prices for air
cargo in the latest settlement with the Commerce Commission.

In the High Court in Auckland, Justice Chris Allan today
ordered the airline to pay the third-biggest fine out the
seven settlements to date, taking the running tally to
$24.48 million. SIA Cargo, a subsidiary of Singapore
Airlines, admitted liability for agreeing to fuel and
security surcharges in Indonesia and Malaysia for cargo
flown to New Zealand over a four-year period. The judge also
awarded $260,000 in costs to the antitrust regulator.

"It
is common ground that the defendant’s conduct was at the
serious end of the spectrum," the judgment said. "The
surcharges comprised only part of the total charges to
customers for air cargo services, but the agreements must
inevitably have affected price competition and so impacted
upon competitive dynamics in the relevant
markets."

Justice Allan gave a 20 percent discount to the
final penalty to recognise the admissions, and likened SIA
Cargo's role in the cartel to that of Japan Airlines and
Korean Air, which were fined $2.28 million and $3.5 million
respectively.

"Importantly, SIA Cargo implemented a
global competition law compliance programme in 2005," the
judge said. "Since then it has continued to update its
policy, as well as undertaking additional in person training
and instituting web based training."

Other airlines to
have settled with the regulator include British Airways,
Cargolux Airlines, Emirates, and Qantas.

The alleged
price-fixing has been the subject of antitrust process
worldwide, with big settlements from multi-national airlines
in Europe and the U.S. Some of the alleged agreements appear
to have been in place since 2001.

In 2006, air freight
forwarding services in and out of New Zealand generated $450
million in revenue.

The commission's case is scheduled to
continue in the High Court, with Air New Zealand, Cathay
Pacific Airways, Malaysian Airlines, and Thai Airways
International defending the charges.

The regulator dropped
proceedings against Garuda Indonesia, United Airlines and
six Air New Zealand executives last year, and discontinued
against two Qantas executives in February this year.

Last
month, Cargolux lost a bid to throw out a compensation claim
by a local flower exporter over the price-fixing cartel.

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